Shining a Light on Solar Incentives: SRECS in Michigan

Thinking about making the switch to solar power in Michigan? It’s a fantastic decision for the environment and your wallet. But with all the available incentives, navigating can be a bit confusing. This blog post will shed light on Solar Renewable Energy Certificates (SRECs) in Michigan, how they work, and how they compare to other solar incentives in the state.

Key Takeaways

Do SRECS in Michigan exist?

Technically, Michigan doesn’t have a functioning SREC market right now. SRECs typically rely on a Renewable Portfolio Standard (RPS) that mandates utilities to source a certain amount of electricity from solar power. Unfortunately, Michigan’s RPS doesn’t have a solar carve-out, which is the specific requirement that creates demand for SRECs.

In essence, Michigan lacks an operational SREC market. SRECs are commonly dependent on a Renewable Portfolio Standard (RPS) that dictates utilities obtain a specific portion of their electricity from solar energy. Regrettably, Michigan’s RPS does not include a solar carve-out, a specific mandate that generates a need for SRECs.

So, How Can You Benefit from SRECS in Michigan?

The good news is that Michigan residents can still participate in the SREC market – not their own state’s. Since Michigan borders Ohio, which does have a functioning SREC market, you can enroll your solar system in the Ohio SREC program. This allows you to earn and sell SRECs based on your system’s electricity.

Fortunately, Michigan residents can still participate in the SREC market, just not within their home state. Because Ohio, which shares a border with Michigan, operates a functional SREC market, you can register your solar panel system in Ohio’s SREC program. By doing this, you can generate and sell SRECs using the electricity produced by your system.

Qualifying for SRECs in Michigan

The qualification process for Ohio SRECs involves registering your solar energy system with the Ohio EPA. Depending on your system size and chosen program, additional steps may exist. Check with a solar installer or the Ohio EPA for the latest details.

Savings with SRECs in Michigan: A Variable Picture

The amount you can save with SRECs depends on the market price, which fluctuates based on supply and demand. While Michigan doesn’t have its own market, you can look at historical data for the Ohio SREC market to get a general idea.

The savings potential from SRECs is determined by the market price, which changes according to supply and demand. Although Michigan lacks its own market, past information from the Ohio SREC market can provide a rough estimate.

Beyond SRECS in Michigan: Exploring Other Solar Incentives

Even without a robust SREC program, Michigan offers other incentives to make solar power more affordable. Here are some to consider:

• Federal Investment Tax Credit (ITC): This federal tax credit covers 30% of your solar system installation costs. This tax credit from the government offsets 30% of the expenses associated with installing your solar system.
• Michigan Saves: This nonprofit organization offers loans and rebates for solar energy systems. The non-profit organization provides financial assistance through loans and rebates for solar energy systems.
• Property Tax Exemption: Michigan’s solar property tax exemption fluctuated over the last ten years. Initially established, it was eliminated in 2013 during the administration of former Governor Rick Snyder. However, in 2019, Governor Gretchen Whitmer passed a bill to revive the exemption for solar energy systems in the state.

Net Metering in Michigan

In certain states, net metering allows you to receive credit at the full retail rate for any excess electricity your solar panels generate and send back to the grid.
Your utility company must monitor both the amount of energy produced and the amount you actually use to ensure you receive credit for the surplus energy your solar system produces.

In 2019, the Michigan Public Service Commission eliminated full retail rate net metering. It replaced it with a Distributed Generation Program that provides energy credits for solar customers at a reduced rate compared to the retail rate. This means you will receive credit at approximately half of the full retail rate for the electricity you feed back into the grid.

It is now more important than ever to properly size your solar system based on your energy usage and consider investing in onsite energy storage to avoid selling your electricity back to the utility company at a lower rate.